Global

SAP Services Group

White Paper

Which SAP Warehouse Management Application

About the Author 1
is Right For You?
Executive Summary 2

What Does the Evolution

of SAP WM Look Like 2 ABOUT THE AUTHOR
What is Some of the Newer Catalyst International has long been recognized as an industry leader in warehouse
SAP WM Functionality 6
management and SAP® R/3® implementation consulting with noted expertise in
TRM’s Bottom Line Value 7 SAP’s Logistics Execution System (LES), Warehouse Management (WM) and Task
SCM eWM Capabilities 9 and Resource Management (TRM).
Which WM Application is
Right for Your Warehouse 11 Catalyst was a key player in SAP’s internal, pre-release testing stage for TRM in
Walldorf, Germany and successfully rolled out TRM to an R/3 Enterprise ramp-up
Conclusion 13
customer. Catalyst also played an integral role with pre-release testing of SAP’s
native radio frequency data collection product, SAPConsole™ and was the first to
implement it with a customer using R/3 release 4.6.

Our in-depth expertise of SAP LES products and functionality—along with our close
relationship with SAP®—provides us with an intimate knowledge of the development
vector SAP is applying to the LES product suite and allows us to advise customers
on strategic operational decisions, provide them with detailed information on key
integration points and quickly assist them in identifying fit/gaps with current and
future release levels.

© 2007 Catalyst International, Inc.

EXECUTIVE SUMMARY
This white paper is designed to give warehouse operations managers and IT managers
a useful framework for understanding SAP’s newer Warehouse Management
application functionality. It will also assist companies in understanding which WM
application to select when it comes time to upgrade their SAP environments.

The paper includes the following information:

■ What does the evolution of SAP WM look like?

A brief recap on past and future functionality for SAP’s WM application.

■ What is some of the newer functionality that SAP WM has to offer?

With the advent of TRM and eWM, the functionality within the WM application
has been vastly improved. Capabilities such as cross docking, dynamic cycle
counting, slotting, yard management and task interleaving are now standard
functionalities within particular releases.

■ What WM solution is right for you when it comes time for an upgrade?
A comparison chart on some of the newer functionality and release information to help
you make a more informed decision when it comes time to upgrade your R/3 system.

WHAT DOES THE EVOLUTION OF SAP WM LOOK LIKE?

SAP has come a long way in the warehouse management application since its
release of the R/2 product. A brief evolution is below:

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SAP Releases by Date
R/2
1990’s.................................................WM was a sub-module within the R/2 system
(strong locator system, but not a robust WMS)

R/3
Version 3.1......................................... 1998
Version 4.0B...................................... 5/22/98
Version 4.5B...................................... 5/17/1999
Version 4.6B...................................... 1/31/2000
Version 4.6C...................................... 5/29/2000
Version 4.7 xt. 1.1.............................7/15/2002
Version 4.7 xt. 2.0.............................9/22/2003
mySAP ERP 2004 (ECC 5.0)...... 2005
mySAP ERP 2005 (ECC 6.0)...... 9/1/2006
mySAP SCM eWM 5.0....................Late 2005/Early 2006
mySAP SCM eWM 5.1....................Targeted for Q3 2007

Functionality built within SAP WM ■ Internal Movements

3.X included the following: ■ Outbound Material Processing
■ Storage and Facility Management – ■ Physical Inventory
manage different batches, stock types > Annual

(vendor consignment stock, own), and > Continuous

stock status (quality, unrestricted) > Cycle Count

■ Warehouse Structure – basic building

> Zero Stock Check

blocks of the warehouse (storage ■ Basic Reporting

type, storage sections and bins) ■ Authorizations
■ Stock Management – mixed and
■ Archiving
homogeneous storage possible ■ Interfaces Available to External
■ Material Master Data – addition of Systems (i.e. RF devices)
WM fields in MM views ■ User Exits Available
■ Units of Measure – WM unit possible

at WM level Functionality built within SAP WM

■ SLED
4.0 included the following:
■ Lean WM
■ Posting Changes – material to
■ New Org. Structures such as gates,
material, stock status to stock status
■ Transfer Requirements/Transfer
picked items zone, and pick area
■ Capacity to search up to 30 Storage
Orders – See Appendix A
■ Ability to Post Stock Differences –
Types (previously 10)
■ Number of Storage Unit Types
upon putaway only
■ Fixed Bin Replenishment
increased to 30 (previously 10)
■ Number of Storage Sections searched
■ Putaway Strategies

■ Picking Strategies
increased to 30 (previously 10)
■ Up to 99 items can be managed in a
■ Storage Unit Management

■ HAZMAT
bin with Putaway strategy P
■ Inbound Material Processing
(previously 14)

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■ More than 1 storage location can be ■ WAM (warehouse activity monitor)
warehouse managed under the same ■ Physical Inventory Changes – monetary
warehouse number (previously only 1 limits can be set for recounts
warehouse per storage location and ■ Quantity reduction
plant was manageable). ■ Display material texts with Release
■ Pick strategy performance enhanced Order Parts Staging
(active capacity check)
■ WM unit of measure possible at Functionality built within SAP WM
material level 4.5A included the following:
■ New component added (LES) vs. WM
■ Enhanced stock search (i.e can
■ dWM (Decentralized Warehouse
search own stock before vendor
consignment stock) Management) available
■ KANBAN capabilities
■ Enhanced storage section search
■ Destination bin changeable upon
capability
■ Create TO for GR from Return Stock putaway TO confirmation
■ Ability to close out TR’s (i.e. set
functionality
■ Customer Exit available for delivery complete)
■ TO processing comment added
Replenishments
■ Basic pre-allocated stock cross
■ Planned TO times – used for the
basis of workload calculation and docking (hot list)
■ Inbound delivery becomes available
incentive wage
■ Ability to putaway stock that was
■ TO Splitting – balance workload
between users incorrectly picked on a delivery
■ Enhanced picking reports
■ Ability to change a TR
■ Enhanced HAZMAT processing
■ Ability to process posting changes
■ Physical inventory enhanced –
completely in WM
■ Enhanced putaway strategy K and Bulk inspection lot processing
putaway (ability to block from further
Functionality built within SAP WM
stock placements to ensure FIFO)
4.6A/B included the following:
■ Ability to process QM samples in the
■ Ability to suppress differences in
background
confirming TO’s
■ 2 Step Picking
■ Two-step TO confirmation possible
■ Enhanced strategy M through rounding
■ Native RF capabilities
quantities on the material master
■ RF Monitor available
■ +++ calls a customer exit for
■ Enhanced dWM capabilities
Stringent FIFO
■ Use of Enjoy transactions (LS01 to
■ Pre-picked shipping units
LS01N) make transactions easier to use
■ Free Packing
■ Reports converted to ABAP List
■ Planning and Monitoring Tools
Viewer (ALV) – gives the user the
■ Picking Waves
ability to sort, sum, etc.
■ Rough Workload Estimator

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Functionality built within SAP WM
4.6C included the following:
■ Added additional SAPConsole (RF)
transactions and fixed many bugs
■ Ability to create a replenishment TO
automatically
■ Handling Unit Functionality
■ Physical Inventory Changes –
counting at quant level possible
■ Basic interleaving possible
■ Enhancements to dWM – posting
changes initiated from dWM, delivery
split
■ Proof of Delivery functionality
■ Packing Station
Functionality built within SAP WM
4.7 xt. 1.1 included the following:
■ 1 TO possible for multiple deliveries
■ Partial GR for an IBDN possible
■ TRM (Task and Resource
Management) introduced
■ Data changes to dWM can be timed
■ Several ERP systems can be tied to
a single dWM instance
Functionality built within SAP WM
4.7 xt. 2.0 included the following:
■ Support for DSD (Direct Store
Delivery)
■ Planned and Opportunistic Cross
Docking functionality
■ Value Added Services
■ Yard Management
■ Dynamic Cycle Counting
■ TRM enhancements (Log monitor,
capacity checks at the node level)
■ RF serial number capture possible on
the Delivery
Functionality built within mySAP ERP
2004 (ECC 5.0) or mySAP ERP 2005
(ECC 6.0) includes the following:
■ Advanced Transportation Planning
and Vehicle Scheduling using APO
■ Direct Store Delivery enhancements
■ Archiving enhancements
■ Progress Confirmation of jobs
(background status update every 30
min, foreground every 10 seconds)
■ WCU (Warehouse Control Unit) –
controls automation of warehouse
devices; optimized when used in
conjunction with TRM
Functionality built within mySAP
SCM eWM 5.0 includes the following:
■ Slotting
■ Rearrangement
■ Transportation Cross Docking
■ Tight EH&S Integration
■ Enhanced Customer Returns –
requires CRM
■ Kit to Order – requires CRM
■ HUM activated at the Storage Type
Level
■ Serial Number Enhancement – can
track SN to a bin without needing an
HU
■ Storage type and section now 4 digits
■ Bin name is now 18 digits
■ Material Flow Systems support
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 WHAT IS SOME OF THE NEWER SAP WM FUNCTIONALITY?

TRM offers unique features Task and Resource Management

for optimized materials
movement, a transparent
view of warehouse
processes and value added
services support.
As of SAP release 4.7, TRM strengthens and completes the LES/WM solution by
optimizing material flows via task execution and resource deployment. TRM breaks
down material movements to a task and resource level and optimizes the sequence
in which they are executed, ensuring that the right task is completed by the best
resource at the most optimal time.

With TRM’s support for
value added services, you
can easily label goods or
accommodate customers’
special packaging requests.
TRM helps you to manage your warehouse processes more efficiently because it
achieves an unparalleled degree of process visibility within the system by tracking
any activity performed on the warehouse floor. TRM uses a systemic model of the
warehouse’s physical layout to deploy resources according to the actual workload,
the resource’s qualifications and the current geographic positions of the resources.
The efficient deployment of resources contributes to a considerable reduction of
costs in material flow processing.
SAP Logistics Execution System

TRM Features
> Task Execution
> Prioritization

> Interleaving

> Value Added Services

> Tracking and Monitoring

Bottom line, TRM will

optimize your supply chain
management, improve your
customer and partner
relations and provide cost
SAP WM and TRM are closely integrated and work hand-in-hand to manage and
savings. maintain the workload in warehouses. WM provides the movement, operation
demands, high-level scheduling and planning. TRM distributes the work among the
various resources.

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WM Versus TRM: The Difference

TRM’S BOTTOM LINE VALUE

TRM’s ability to optimize resource deployment, material flow, routing and process
visibility enables an accelerated supply chain, which in turn leads to improved
customer service, better partner relations and overall cost savings.

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Extended Warehouse Management

Extended Warehouse Management (eWM) was released with SAP’s Supply Chain
Management module (SCM). The terminology can be confusing, but there are really
two different forms of eWM, depending on how they are being used. When SAP
Warehouse Management is being used with SAP release ECC 5.0 or higher, in the
centralized mode, it is referred to as ERP eWM. When SAP WM is being used in
the decentralized form in conjunction with the SCM module, it is referred to as
SCM eWM. In it’s decentralized form, the capabilities of eWM are expanded.

Basically, ERP eWM is little changed from the functionality that exists in SAP 4.7.
With SCM eWM, the functionality includes what 4.7 xt. 2.0 can do as well as
improved workflow, process integration and the various other features mentioned
above (under evolution).

SCM eWM offers increased flexibility and capabilities beyond ERP eWM. Typically,
SCM is tailored to organizations who have high SKU and line item volumes, very
fast moving product, complex cross docking requirements, detailed packaging and
shipping processes, and third party logistics services (3PL) on either the Inbound or
Outbound side, or both.

The following table represents the various types of SAP Warehouse Management
that are available for each release. You can see that there is a migration towards
SCM eWM.

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SCM EWM CAPABILITIES
Inherently, SCM eWM should operate on a decentralized server. This is designed in
this matter for maximum performance and flexibility. Periodically, you will see
references to the Service Parts industry, as this industry made the first use out of
this solution; however, SCM is designed to work across multiple industries. It all
depends on the functionality and business requirements that your organization
needs to meet. This is discussed in more detail in the next section.

Within SCM 5.0, the module is split into two sections:

Service Parts Planning

■ Strategic Supply Chain Design

■ Parts Demand Planning

■ Parts Inventory Planning

■ Parts Supply Planning

■ Parts Distribution Planning

■ Parts Monitoring

■ Supply Network Collaboration

■ Supply Chain Analytics

Service Parts Execution

■ Quality Assurance and Control

■ Warehousing and Storage

■ Physical Inventory

■ Cross Docking

■ Outbound Processing

■ Transportation Management

■ Execution Monitoring

■ Execution Collaboration

■ Analytics

Minimum Architecture
The following minimal architecture is required to run SCM eWM:
■ CRM 5.0

■ SCM 5.0

■ GTS 7.0

■ Plug in basis 2005.1

■ ECC 6.0 (mySAP ERP 2005) – see note below

■ Netweaver 2004s

NOTE: For SCM eWM - Service Pack 6 supports connections (through IDOCs and
Bapis vs. qRFC) to releases from 4.6c to mySAP ERP 2004 (ECC 5.0), but full
functionality does not exist

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Functionality
Many of the underpinnings of TRM have been incorporated into the SCM eWM
product (such as Tasks, Resources, 3-dimensional warehouse, etc). Like TRM,
SCM eWM should use Handling Units to move and track stock in the facility. SAP
has enhanced the use of Handling Units within the warehouse to make them easier
and more flexible to use compared to previous releases. Other functionality features
of SCM eWM include:

Deconsolidation – Upon receipt, the products can be directed to a

deconsolidation work area where like products can be separated off of the mixed
pallet and put away as homogenous units.

Rules and Prioritization – Increased flexibility in work assignment and

prioritization of tasks

Explicit and Implicit Counting – Used as part of the Quality Assurance process
for counting goods upon arrival into the warehouse

Wave Creation and Assignment – Improved tools in order to group and

efficiently pick Outbound Orders

Kitting – Kit to Order only. The functionality for Kit to Stock does not exist at this
time. Need SAP CRM and APO in order to perform kitting. Supports complex
kitting.

Slotting – SCM eWM has slotting tools available to determine the best location of
product storage within the warehouse. It is broken into 2 pieces:

1. Slotting – more of a planning tool

2. Rearrangement – the execution of the planning run

Yard Management – similar to 4.7, however the logical HU is now replaced with a
TU (transportation unit)

Post Processing Framework (PPF) – used to be known as Output

Determination. This provides additional functionality after a transaction has occurred
(i.e. trigger messaging, execute follow-on transaction, etc).

Returns Processing – supports a robust returns function. Must use CRM in order
to support this process.

Key Changes
■ Warehouse Number, Storage Type and Storage Section are four characters

■ Storage Bin is 18 characters and bins are now unique to the warehouse (i.e.

cannot have two bins named the same thing within the same warehouse)
■ Handling Units are now activated at the Storage Type level

■ Serial Numbers – can be tracked to a bin without the use of an HU (it is a new

field identification)

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New Terminology
■ Activity Area – logical grouping of bins that are used to facilitate activities such as

picking, putaway and physical inventory. These assist in Queue assignment and
Warehouse Order creation.
■ Warehouse Task –equivalent of a Transfer Order (TOs no longer exist)

■ Warehouse Order – Groups together Warehouse Tasks. The warehouse order is

the document the end users execute upon.

■ Stock Identification – Unique number for a segment of stock. It includes attributes

such as material, quantity, batch and stock type. It technically replaces an SU (storage
unit), but the advantage of a stock ID is that it can exist in an interim location.

WHICH WM APPLICATION IS RIGHT FOR YOUR WAREHOUSE?

SCM eWM and 4.7 TRM are tailored to be of most benefit to the warehouse with
high activity levels, high volume and complex operations. These and other factors
should be considered when determining which application is a fit for your facility.
Warehouse operations with a high level of distribution activity, volume, operational
complexity and value added services are the best fit for SCM eWM and TRM.

High Level of Distribution Activity & Materials Movement

SCM eWM and TRM were designed to benefit warehouse operations that are more
distribution oriented as opposed to material storage oriented (e.g., a production
supply facility). If efficient management, movement and distribution of materials are
core competencies and critical success factors for your organization, TRM is a
good fit and will significantly enhance your labor efficiencies and minimize your
labor costs.

High Level of Volume

TRM and SCM eWM offer the most value to those facilities with a high level of
material flow velocity (typically characterized by the number of transfer orders or line
items), high transaction volume, a high number of warehouse associates per shift
and multiple types of material handling equipment. The higher the number, the
better the fit. For example, if you have 50 trailer loads a day, you will reap a much
higher benefit from the system than if you only have five.

Operational Complexity
SCM eWM and TRM offers strong functionality for complex material flows, such as
the use of special equipment that cannot physically make certain material moves
efficiently, but instead uses pick and drop locations. The system’s decomposition of
TOs into tasks offers an advantage for these complex scenarios. Other operational
complexities such as pallet decomposition and other warehouse work center
operations are handled much better in SCM eWM and TRM.

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Level of Value Added Services
TRM and SCM eWM also offer strong functionality for value added services such
as special labeling, pricing, packaging, and hazardous materials notes on shipping
documents. The higher the level of services you offer, the better the fit with these
solutions.

Current User of SAP WM and Decentralization

Current users of SAP WM will find an independent systems configuration
audit and warehouse operational review beneficial prior to undertaking the
implementation of TRM or SCM eWM. It is highly recommended that users
considering these solutions as part of the initial WM rollout seek experienced
consulting support because of the complexity and abstraction of these solutions.
Other factors that should be weighed when considering the implementation of TRM
or SCM eWM is the organization’s ability to decentralize the WM/TRM/SCM eWM
system as well as the use of Storage Units (SUs) or Handling Units (HUs).

The decentralized WM architecture is strongly recommended for TRM and is

assumed for those who want SCM eWM because of the heavy processor load that
TRM and SCM eWM can pose for your core system. HUs or SUs work very
smoothly with TRM and make task processing more efficient. HUs are necessary
when considering SCM eWM. Implementing decentralized WM and choosing
whether or not to use HUs or SUs should be considered a prerequisite to
implementing TRM.

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CONCLUSION
SAP’s Task and Resource Management module and SCM eWM both deliver value
by optimizing labor utilization and providing warehouse process monitoring and
controlling functionality. Bottom line, TRM and SCM eWM enable warehouse
activities to be executed better, faster and cheaper than possible without a
warehouse optimization engine.

When determining which solution is the right fit for your operations, it is important to
consider that TRM and SCM eWM best benefit warehouse operations with high
levels of distribution activity, volume and operational complexity. Companies who
decide to implement TRM or SCM eWM will gain the benefit of an accelerated supply
chain, improved customer service, better partner relations and overall cost savings.

For more information on how TRM, SCM eWM or any SAP WM solution can optimize
your warehouse operations, contact Catalyst International at 800-236-4600 or
www.catalystinternational.com

Corporate Headquarters 800.236.4600

European Headquarters +44 (0) 1895 450400
www.catalystinternational.com
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